**Identify any favorable and unfavorable trends in the following income statements by preparing a vertical analysis. Write a paragraph explaining what you find. (Round percentages to two decimal places.)****Becker Corporation****Income Statements****For the Years Ended December 31**| | Year 2 | Year 1 ||---------------|----------|----------|| Revenues | $394,000 | $212,500 || Operating expenses: | | || Wages expense | $79,000 | $65,000 || Rent expense | $19,000 | $18,000 || Utilities expense | $21,000 | $14,200 || Interest expense | $7,500 | $7,800 || Total operating expenses | $126,500 | $105,000 || Net income | $267,500 | $107,500 |The table above presents the income statements of Becker Corporation for two consecutive years, illustrating changes in revenues, various operating expenses, and net income. It can be used to conduct a vertical analysis to identify trends in financial performance. By examining the percentage each item contributes to total revenues, strengths and weaknesses over these periods can be assessed, enabling informed strategic decisions.

Identify any favorable and unfavorable trends in the following income statements by preparing a vertical analysis. Write a paragraph explaining what you find. (Round percentages to two decimal places.) Becker Corporation Income Statements For the Years Ended December 31 Year 2 Revenues Operating expenses: Wages expense Rent expense Utilities expense Interest expense Total operating expenses Net income Year 1 $394,000 $212,500 $ 79,000 $ 65,000 19,000 18,000 21,000 14,200 7,500 7,800 $126,500 $105,000 $267,500 $107,500

Identify any favorable and unfavorable trends in the following income statements by preparing a vertical analysis. Write a paragraph explaining what you find. (Round percentages to two decimal places.) Becker Corporation Income Statements For the Years Ended December 31 Year 2 Revenues Operating expenses: Wages expense Rent expense Utilities expense Interest expense Total operating expenses Net income Year 1 $394,000 $212,500 $ 79,000 $ 65,000 19,000 18,000 21,000 14,200 7,500 7,800 $126,500 $105,000 $267,500 $107,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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